Home EMEAEMEA 2006 Networks in the age of IP

Networks in the age of IP

by david.nunes
Mauro RighettiIssue:EMEA 2006
Article no.:13
Topic:Networks in the age of IP
Author:Mauro Righetti
Title:CEO and board member
PDF size:276KB

About author

Mauro Righetti is the CEO of Italtel and a member of its board. Previously, he took part in the creation of Smart Venture Partners, a venture capital firm active in the hi-tech sector. With the Oracle group, he founded and managed Oracle Italia, was Vice President of Oracle South Europe, Chairman of the Corporation Management Advisory Board, and Chairman and Member of the board of Network Computer Inc. – a NASDAQ-listed member of the group. Mr Righetti started his career with Olivetti, where he assumed roles of increasing responsibility until his appointment as industrial area manager and member of the management committee.

Article abstract

To remain competitive, operators throughout the world are upgrading their infrastructures to integrated IP-based networks for voice and data. These next generation networks, NGN, let them offer a wide range of enhanced voice- and data-based features, including VoIP, data, video, video-telephony and broadcast TV, among others. It also gives operators the flexibility to provide business customers with a range of managed and hosted services, such as IP-PBX switchboards, which offer fixed and wireless convergence to facilitate company communications.

Full Article

A promising scenario The development of broadband IP technologies introduces the possibility of new services with multimedia content, which offers, and drives, the opportunity to bring about a major transformation of the architecture of telecommunications networks. In this regard, the leading operators in the sector in the European region are making investments in upgrading the network, from an infrastructure geared to transporting voice, where data is an add-on, to an integrated infrastructure based on IP technology for voice, video, data, video-telephony, broadcast TV, and other multimedia services that will emerge in the future. We are talking about Next Generation Networks, NGN, or multi-service networks, which enable the convergence of all types of communication to a single network infrastructure based on the IP protocol. The convergence of video, voice and data communication services to a single infrastructure reduces costs, simplifies installation and support, and allows operators to offer new, more flexible service models known as managed and hosted services. The trend of evolution towards a Voice over IP, VoIP, infrastructure and application solutions is now unstoppable; it is aimed at all businesses that have widely-distributed offices and which, consequently, need a voice communications system that is efficient, economical to manage, scalable, and open to IT standards for development, customisation and integration with new applications. VoIP therefore applies to all areas of the market, from consumers to small enterprises, from companies to public administrations. The Yankee Group expects the aggregate market for next generation networks infrastructure and services to grow worldwide from €3.5 billion to €6.7 billion, resulting in a 24 per cent compound annual growth rate (CAGR), between 2005 and 2008. More specifically, the prospects for growth within EMEA for NGN and next generation services, NGS, are very strong: capital expenditures will show a 22 per cent CAGR, growing from €833 million to €1.5 billion. VoIP: new ways of working and interacting The advantages deriving from this are many, both from an organizational and an economic point of view. VoIP has the power to change – radically change – ways of working and ways of interacting with colleagues, external suppliers and customers. The convergence of the telephone network with the Internet/intranet will bring unexpected consequences for personal behaviour in areas such as people’s mobility and their way of interacting with each other. There is another form of integration as well – the integration of advanced telephony services with software applications that were once associated with computers. VoIP also has the power to eliminate completely the costs of ‘on-net’ traffic, that is traffic consisting of internal calls. At the same time, VoIP can greatly reduce management costs, since the activation or reconfiguration of a user’s service is managed centrally from a digital dashboard. In addition to these immediate benefits resulting from VoIP, it reduces the entry costs of advanced communications services, such as video communication, to the point where any user device can be equipped with these services according to their requirements. This avoids unplanned investments that grow over time. Indeed, these services do not require special ad-hoc investments in infrastructure and terminals, since they are, in fact, an integral part of the multimedia solution over IP. VoIP lends itself very well to the implementation of solutions like IP contact centres, which integrate the company’s multimedia communication system with a Customer Relationship Management, CRM, system, resulting in considerable benefits in terms of front-end service. The intelligent communications station A single company network, both local and inter-office, can connect personal computers, IP telephones and fax machines with, nowadays, almost vanishing functional differences. In fact, with VoIP a telephone is no longer just a telephone, but is, rather, becoming an intelligent general communication station that can integrate applications such as email, the company directory, unified messaging and, for specific segments, even custom-developed vertical applications. What is new here is the possibility of choosing which terminal, IP phone or PC, to assign to an individual user based on their specific requirements. Whatever the choice, it will always provide access to multimedia communication. In the case of VoIP, the service will include a ‘presence’ indicator, which enables the user to verify the presence of other people, of each individual, on the network. This will indicate each user’s availability to receive messages, to receive telephone calls, or even his ‘do not disturb’ status if he’s busy performing other operations with his terminal (PC, PDA, telephone). VoIP naturally goes together with the Internet and will become an integral part of future multimedia communications. Convergence for business Within an enterprise, VoIP enables the functioning of fixed/mobile convergence based on the IP protocol. For example, it would be of great use to companies, to governments, the public administrations, to be able to integrate contact centres in their telecommunications infrastructures. This would increase their capacity to provide customer or public services via innovative portals that support applications such as unified messaging, click-to-dial and videoconferencing. Companies with widely distributed offices, with a great many phone lines and with significant amounts of traffic on the networks they use, will have quicker returns if they already have an IP-based data network. Large companies typically have telephone costs that significantly boost operating expenses; they also find themselves investing to tackle their demanding and increasingly complex infrastructural problems. Large public and private organisations are the main beneficiaries of solutions that make use of telephony over IP because of the ease of recovery these systems provide, their efficiency and low cost and, above all, because of their need to rationalise the channels of communication essential to facilitate teamwork. Together with this, large companies often have an existing infrastructure that makes it possible to implement a painless changeover to VoIP technologies. The existing infrastructure offers a point of entry that facilitates the transition to the new system and takes the maximum advantage of the company’s own, often-under-utilised, local and inter-office network. Nevertheless, to decide upon the sort of communications system that a company requires, it is not enough to consider the level of earnings or the number of employees; it is the telephone cost per employee that should drive the decision. A small market research company that makes extensive use of telephony, for example, could have a greater need to switch to VoIP than a manufacturing company that has greater revenues and has more employees. Carrier revolution – hosted and managed solutions Another important and innovative feature for VoIP users is that operators and service providers can offer remotely managed solutions that deliver cutting-edge communications services without the users having to deal with all the associated technological complexities. This is a major step forward compared to the usual alternatives of contracting a service company or tackling the technology barrier on its own. Either alternative can slow down the introduction of innovative services. Using the in-house staff to tackle new technologies and introduce the new services can expose the company to unpredictable, unquantifiable or, even, unmanageable risks. With managed services, the service providers become outsourcers, in the sense that they supply their users, on the one hand, with equipment and, on the other hand, with staff for managing the infrastructure. In other words, we are seeing the growth of a managed VoIP model of outsourcing. This is a turnkey formula in which the operator not only offers the voice transport service and maintains the telecommunications exchange, but also provides the infrastructure for the service, eliminating, for the most part, investments that otherwise would have had to have been made by the user. There are essentially two ways that service providers supply managed VoIP services. The first is hosted IP PBX (switchboard) equipment dedicated to the company but physically located and managed within the service provider’s network. The second option is managed IP PBX: the equipment is installed at the client’s site and remotely managed by the service provider. Operators providing these services, introducing these management models, can charge for these services and, in this way, build revenues to compensate for the losses resulting from the reduction in voice traffic brought by VoIP. By offering a diversified portfolio of services on a fee basis, such as management of voice service, voicemail, and unified messaging, service providers can build their revenues while increasing overall customer loyalty.

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